Route 1: Exploring Happiness And The Psychology Of Life Two

Show Chapters

Getting to life after full-time work

H 01 Overview: is retirement complicated – or is it scary?

H 02 Why we feel happiest in our later years

H 03 Pacing our lives as a five-act play

H 11 Life’s abundance is not just about money

H 12 How best to spend time and money


The new you, in four parts

(a) Yes, it’s a change

H 21 Reinventing yourself in a new land

H 22 Transitioning away from full-time work

(b) Let’s identify some lessons and types

H 31 Move beyond the workplace, explore life’s journey

H 32 What type of retiree will you be?

(c) Possible action steps

H 41 Answering the deep question: who am I?

H 42 Answering the important question: what will I do?

H 43 Making a plan is important, even if you don’t follow it

H 44 Ever thought about a retirement dry run?

(d) Ways to get help

H 51 What if you don’t have a financial professional to help you?

H 52 Your first conversation with a financial professional

H 53 Wedded to your current lifestyle and work identity?

H 54 Some people use a “life coach” or a “retirement coach”


Aspects of this phase of life

H 61 Three broad phases of life after full-time work

H 62 Risk aversion increases after full-time work

H 71 How healthy is your romantic Venn diagram?

H 72 Love and sex in this phase of life

H 73 Talking to your adult children about this phase of life

H 81 Aging with dignity

H 91 What could be more important than happiness?




This is Walk 6 in Life Two.




Where the route takes us

Our happiness varies through life. You may not know that typically the way happiness varies with age is predictable.


Let’s start our stage with an interview with one participant.


Tour Guide: Dan, I found your happiness rating interesting. You rated yourself a 2.5.

Dan: You picked me as your first case study – d’you think I’m so extreme? Now I’m embarrassed, get me out of here!

TG: I’ll do that, Dan, I’ll remove the reference to you if you’re still uncomfortable at the end of this stage, I promise. I chose you not because you’re extreme but for the opposite reason, because you’re so typical. Will you go along with me for a few minutes?

Dan (hesitantly): OK.

TG: I’m particularly interested in the 2.5, because that’s not a permissible rating. I’m guessing you were torn between a 2 and a 3 [on a scale of 1 to 3]. Is that right? And can you explain what makes you think of a 2 and what makes you think of a 3?

Dan (summarized from multiple comments): I’m pretty happy, really. Most of the time. I just think of a 3 as perfection, and I’m not there. But a 2 sounds so middling, and I’m happier than that. As I say, most of the time I’m nearer a 3 than a 2. But there are definitely times I feel frustrated. Not just the normal everyday frustrations with life. We all have those, all the time. But sometimes I get depressed.

My family is great. Dorothy and I have been married for over 25 years. We have two grown-up children, both have turned out well, which we’re grateful for, not taking after some of their friends who seem to have given up already. The older one has just graduated from university, and actually has a job. He’s living at home to save money, which is fine with us, because he’s agreed to put half of what he’d normally pay as rent into his retirement plan, so he wins now and he’ll win again later. The younger one will graduate in a couple of years. So our worst cash outflows will end soon.

But my career isn’t going anywhere, and at 50 I wonder if I’ve peaked. I see younger colleagues promoted, and I know I’m never going to make it higher. That’s a downer. I like what I do, but reporting to younger people is a downer. I feel guilty that I haven’t done enough to prove myself. Should I move? It’s not a healthy environment for someone my age to look for something new. And what would happen to my pension? I have no idea. And even thinking about a pension is depressing!

We live a comfortable life, but somewhere along the way the excitement has vanished. So I’m not a 3. But I look around and we’ve been lucky in so many ways, so much could have turned out worse. So I’m not a 2 either. I don’t know, I’m just mixed up!

TG: Thanks, Dan. It’s never easy to talk about yourself, especially about things that haven’t worked out the way you hoped. But you must have seen some nodding heads in the group! And here’s the applause for your courage in doing this.

As I said, you’re not only far from unusual, you’re pretty typical. We’ve all felt failure, just in different ways. Let me explain what has been found about happiness and how it varies with age. The good news for you is: the best is yet to come! Oh good, I’m glad that brought a smile to your face.


I’ve actually looked at a lot of research on happiness, and even wrote a book about it. When I gave talks about it, one angle in particular appealed to people: the way happiness tends to change with age. That’s my focus here.


First, how happiness is measured. Very simply! Nobody has an objective way to measure it, like blood pressure or your pulse rate, so it’s entirely subjective. Essentially, you judge your own state of happiness. Pick a number: 1 is low, 2 is middling, 3 is high – that sort of thing. Sometimes a variation is used: imagine yourself on a happiness ladder, and state (from 0 to 10) which rung of the ladder you have climbed to.[1]  Obviously the verdict would vary from person to person, but it’s amazing, when you average over thousands of people, how consistent the results are. Averaging tends to smooth out the personal idiosyncrasies.


Next, the age connection.

When I’m showing this on a screen, I introduce the age connection through a couple of pictures to which I’ve given captions. But it’s easy enough to imagine them without seeing them. Let’s see if you find the captions credible or laughable.

The first picture is of a group of 70-year-olds. It’s taken from behind them. They’re sitting on a park bench, gazing into the distance. And I imagine them thinking, “We’d love to be 20 again!” Credible? OK.

The second picture is a picture of a group of 20-year-olds. They’re facing the camera, standing in front of a swimming pool, in their swimsuits, and they’re giggling at something together. And my caption imagines them thinking, “If only we were 70!”

Right! Nobody believes that. 20-year-olds and 70-year-olds both believe that 20-year-olds are happier than 70-year-olds. And yet it’s a fact that, in more than 70 developed and developing countries, the graph showing how happiness varies with age follows a U-curve.

Happiness is typically high when we’re young, it declines as we live our lives, and then it turns up again in the middle years of life, eventually surpassing the high level in our youth. The average age at which the curve turns upwards varies from country to country, but typically it bottoms out between 40 and 60. (Are you already wondering where you fit on this curve? People tell me it’s their first thought!)

The U-curve holds even when you subdivide the data by whether the respondent is male or female, or whether the person has a partner, or whether there are children at home, or by their employment status. There’s always a U-curve. In every country.


Of course, the big question is: why? And I think I’ve found an explanation. Let me start with the psychological aspect of the explanation. Here’s the simplified version.

When we’re young we lack experience. We know nothing! But we’re going to change the world, right? In our youth, therefore, we seek knowledge and experience, through adventure. We seek excitement. Our anticipation is that adventure and excitement will bring happiness. We imagine how well things are going to turn out. “They lived happily ever after!” – that sort of feeling. This is emotional, driven by our powerful limbic system, a part of the brain we share with mammals.[2]

As we age and gain experience, we start to realize that few things work out as well as we expected or hoped. And we have the psychological and financial stresses of career advancement, and creating and raising a family. Of course many of these things bring happiness. But, as the saying goes, the devil is in the details. And it’s the day-to-day stressful details, the complications we didn’t expect, that reduce our happiness. At some stage we realize – and what triggers it varies from person to person, it varies in the intensity of the realization; for some people it’s a cathartic mid-life crisis – but at some stage, we realize that life will never be perfect.

The neocortex in our brain (it’s the part that does analysis; it’s unique to hominids, like human beings and apes) – the neocortex, as it evaluates what we’ve been through, makes us more realistic. We recognise that perfection, achieving the ideal, as a goal is very difficult, because we can’t anticipate the little things that don’t go quite right.

Ageing not only reduces the number of areas in which our emotional idealizing urge stays dominant. It also causes us to expect less from life, and to settle for less than perfection.  There’s a technical word for this: it’s called satisficing.

By the way, most people think that “satisfice” is an artificial word, obtained by combining “satisfy” with “suffice”. But I understand that satisfice is an old Scottish word that fell into disuse and was revived by Herbert Simon, an American who won the Nobel Prize for economics in 1978.

Instead of the idealist’s “I’ll accept nothing short of perfection!” satisficing says: “Pretty good is … pretty good! And it’s enough!” We see the glass as half full rather than half empty. It’s the contest, the tension, between the powerful, emotion-driven limbic system, and the surprisingly less powerful, rational neocortex. Our measuring stick changes, as we age. It moves from idealistic standards (where everything falls short, and causes regret) to reality (where some things are pretty good). The neocortex finally starts to assert itself. And then we find happiness in contentment, experiencing the things that are trusted and true. Another way to say this, is that we start to count our blessings.


But we can go further. It has recently been discovered that primates (chimpanzees and orangutans) experience the same U-curve of happiness. Wait a minute, I hear you say (because that’s what I said). How on earth do you get a primate to pick a happiness number?

Well, you don’t. You ask their keepers to evaluate them. And you get a U-curve that bottoms out at their equivalent of about age 40 to 45 in humans. Whether you give this finding credibility or not, I’ve found a neurological explanation that fits.[3]

It starts with the stunning fact that the hominid brain’s systems for wanting and liking are different. Wanting is driven by dopamine circuits in the brain. We are effectively dopamine drunks. We crave dopamine. We’re addicted to it. And it drives us to want all sorts of things that are relevant to surviving and thriving. We want to be successful. We want to thrive. This is obviously very helpful from the perspective of evolution. If we weren’t driven, our species would have died out.

But liking is driven by opioid circuits in the brain. And what triggers wanting and what triggers liking are often not the same thing. That’s why sometimes we’re disappointed by achieving what used to be a dream of ours. (“I’ve done it! Shouldn’t I be happier? Is that all there is?”) Also, the dopamine supply is continuous. We always want something. The opioid supply is temporary. The pleasure of getting, or of achieving, is temporary. (Hey, this explains a lot, doesn’t it?) It’s as if our brain says: “I’m going to help you survive and thrive. Whether it makes you happy is a moot point.”

Now, here’s the key to the neurological explanation. The brain’s production of dopamine declines over time, particularly in middle age, so our craving, for things and actions that we want, also declines. In the constant tension between the neocortex and the limbic system for dominance, that decline in dopamine production gives the hominid neocortex more of a chance to override the idealizing urge of the mammalian limbic system. That’s why the U-curve bottoms out, and starts to turn upwards as we age. That’s why the typical 70-year-old is happier than the typical 20-year-old. (And it has nothing to do with retirement!)

Again, I hear you ask: if that’s true, why don’t 20-year-olds yearn to be 70? Why, instead, do 70-year-olds yearn to be 20 again?

It’s true, of course, that 20-year-olds hate the thought of ever turning 70. That would deprive them of the chance to experience life. But what the 70-year-olds say is really more complex than my caption. What they’re really saying is: “I’d love to be 20 again, with my life ahead of me, but with the wisdom and experience I have gained, and the perspective I have developed. If I had all that, I’d be much happier the second time around.” You know, it’s true: youth is wasted on the young.


Anyway, I’m guessing that all of that is a surprise to most of you, as it was to me. But the fact of the U-curve, the message I take from the U-curve, is that, at almost any age, the best in happiness is yet to come!

A final word, in memory of my wonderful father-in-law. He always loved a poem written by Robert Browning and called Rabbi Ben Ezra. (The name is a coincidence – my father-in-law had no idea there would be an Ezra marrying into his family.) It starts: “Grow old along with me! The best is yet to be, the last of life, for which the first was made.” I don’t like to think of this stage as the last of life; I prefer a slight change in words, and I think of this stage as “the best of life, for which the rest was made.”



It’s natural that these turn out to be the happiest years of your life.




Where the route takes us

Our lives seem to divide into learn-work-retire (or, as it’s sometimes referred to, learn-earn-burn!). It might be more productive if instead we divide it into five stages, as Dr Laura Carstensen has suggested. We’ll explore her idea in this stage.


One of the people I admire enormously, and from whom I have learned a lot, is Dr Laura Carstensen, Founding Director of the Stanford Center on Longevity (among many other offices of distinction). In a book called A Long Bright Future[4] one of several ideas she put forward was one about pacing our lives differently. I make it the theme of this stage because, given our enhanced longevity these days (see Stage L 02), and combining it with the stresses that reduce happiness in the working and family-forming years (see Stage H 01), I think her notion is well worth considering.

Here’s my very quick take on her idea.


Today’s thinking creates an age-segregated society. The young study, the middle-aged work, and the old rest or volunteer. That makes it difficult for generations to interact and for anyone, of any age, to find a balance between families, work, community and educational opportunities. And there’s too much action in the middle phase and not enough in the final one.

She suggests diffusing work across the lifespan, and creates a five-act play.

In Act 1 (“The Show Begins”) – this appealed to me, given my professional background – we start a retirement savings account, at birth! More importantly, we encourage continuing education while the brain and emotional maturity are growing, until roughly age 25. Let the adolescent mind learn and explore, incorporating opportunities for travel, community service and interning.

In Act 2 (“The Action Builds”) education continues. We work part-time, trying out more than one job before settling on an employer, perhaps around age 40. This gives us the chance to raise a family in a shared, loving experience. Those who choose not to have a family can continue to learn about life, the world, and work.

In Act 3 (“Taking Center Stage”) our minds are already well shaped by life and work experience, and now we skillfully practice the trade we have chosen. This is where we shift from primarily consuming resources to providing them. Sabbaticals enable us to continue to learn or to do community service.

Act 4 (“The Turning Point”) would continue until perhaps age 80 (yes, 80!). Before then, we would wind down our working careers gradually, perhaps with an “encore career” for a second, deeply personal stage of work life. Perhaps it involves satisfying community needs.

After this “autumn crescendo” (what a lovely phrase!) we enter Act 5 (“Resolution”). We have paid our debts to society, raised our family, and are ready to enter a life phase in which we do whatever we want.


Of course, I recognize that this is an idealized description. The devil will be in the details. And financing Acts 1 and 2, I’m sure, will take more creative thinking than our politicians seem capable of doing (though Act 1 might already be taking place, as young adults live at home longer). But I like Dr Carstensen’s ideas for several reasons.

One is the way in which her proposed phases of life are better suited to our mental and physical development than the current three-act separation model.

Another is that it is detailed enough to give us a basis to discuss something quite different from the current model.

And yet another is that, in my family, I have seen the benefits of putting part of it into practice. I was fortunate enough to work for a company that gives all employees a fully-paid 8-week sabbatical every ten years: a deeply appreciated benefit, with employees returning with stories of what they have done – all different, but invariably happiness-inducing; and it’s shared experiences that we cherish the most in life (see Stage H 12). And our daughter has taken the off-ramp from the traditional model many times. She took a traveling gap year in the middle of university, served in the Peace Corps in Uzbekistan, and after saving for several years gave herself a sabbatical in which she visited all seven continents in a year. (My comment: “You’re so lucky even to have seven continents to visit! In my day we only had five. The Americas counted as one, and Antarctica didn’t count at all!”) With all that experience, she is so much wiser about life than her parents were at the same age.

I included this as a stage in the tour in the hope that those of you who have not yet graduated from full-time work may find a useful idea or two for pacing your own life; and if you’ve already stopped working full-time, perhaps some ideas on interaction may give you feelings of fulfillment and giving something back to society.



There are better ways to live your life than just learn-work-retire. 




This is Walk 4 in Life Two.




This is Walk 5 in Life Two.



This is Walk 7 in Life Two.




Where the route takes us

When we retire, we know what we’re leaving. But we don’t often know what we’re going to. In this stage we’ll see why it’s unhealthy to contemplate a blank future, and why it’s important to recognize that we’ll probably transition gradually, not jump instantly, into a new lifestyle.


In talking with friends and with financial professionals, one big psychological lesson has imprinted itself on my mind. It’s important to retire to a lifestyle, not from a lifestyle.

Let me start off on a tangent.

There’s a difference between thinking about something and experiencing it, touching it. The generation that lived through the Depression was seared by the experience.  Those who had significant amounts at risk during the global financial crisis that started in 2007-8 know the feeling too. A friend and colleague of mine, John Gillies, captured it beautifully this way – he said: “We discovered that Risk has a friend called Pain.” Isn’t that beautifully expressed? Risk is only a concept; in contrast, pain is real, it’s an experience, not just a mental possibility. And we all know the result: once you’ve experienced pain, after that (at any age, from infancy to senility) managing risk, avoiding a painful outcome, is sometimes even more important to us than achieving a good outcome.


Why do I emphasize this? Because, in my turn, I too have left full-time work and touched retirement. And the experience was different from just thinking about it. And there are things I now understand much better. Let me express this personally, even though I understand from others that this sense of dislocation is not uncommon.

Here’s the first thing. I felt that I was a tree that had been uprooted. For over 40 years I planted my roots deep, very deep, into soil that nurtured growth. I loved the experience of life and work. It had a pattern, it had a rhythm that I grew deeply attached to – even if I periodically complained about it (as we all do) and dreamed of the day I could become self-indulgent. Harry Levinson, professor emeritus of psychology at Harvard Medical School, implicitly predicted how I’d feel; he said: “All change is loss, and all loss must be mourned.”[5]

Obviously, this will vary from one person to the next, reflecting the extent to which you find your previous routine fulfilling. My friend Dr Meir Statman captured these feelings when he wrote: “When we lose a job we lose more than money, we lose part of our identities, pride in our accomplishments, and membership in our communities.”[6]

Anyway, my flourishing 40-year-old tree was uprooted. I needed to plant a new tree. I wasn’t entirely sure I knew the kind of tree I wanted it to be, nor where exactly I wanted to plant it, nor if I’d change my mind. I simply couldn’t be sure, because experiencing this … freedom to choose, freedom that I dreamed about, freedom that was the first word in our family Christmas letter that year … it was still new and I wasn’t used to it. It took me three years to define my tree, and I ended up planting roots in new soil, in a different country. These were new roots. They didn’t start out deep. Only time could give them traction.


I tell my friends this because I want them to know that a change in lifestyle leaves a void. I’m lucky in that I finally had an idea about how I wanted to fill that void. But I spent three years in psychological transition. Russ Hill, the President of Halbert Hargrove, a wealth advisory firm on the west coast, introduced me to the concept of transition. Because it’s so powerful, it’s really a whole stage between accumulation (saving and preparing for leaving full-time work) and decumulation (drawing down money to live on in that phase of life), and we should give transition its due and call it a potentially long, intermediate stage.

Too many people never get out of it. And that’s a shame, because direction is so important for happiness. That’s the message I give them. Avoid what I did. Move to a lifestyle, not just from a lifestyle. And see Stage H 43 to realize that it’s perfectly OK to change your plan if you find that it doesn’t work for you.

I see advice in that area as potentially part of a financial professional’s role. The best, the most successful of them, are not just financial and investment professionals, they’re psychological counselors too. I tell my friends: there are many services, many tools, to help you identify and remember what you enjoy, how to integrate these things into your life, how to set goals, even how to set a personal mission statement. There are life coaches. There are budgeting tools. In many countries the government’s statistics department has analyses of patterns of household expenditure on broadly defined spending categories.

Talk to your financial professional or to a life coach. See if he or she is willing to become a partner, not just a professional.



Make sure you have some ideas about your post-work life; transitioning to a vacuum is depressing.




Where the route takes us

You’re not the first to embark on this stage of the journey. Learn from the experience of others.


Dr James Nininger served as President and CEO of The Conference Board of Canada for over 20 years, in addition to other high-level roles. He undertook studies to identify the skills used by successful senior executives as they planned for or transitioned to retirement, so that others could learn from the lessons. (A few were still in their thirties.) He did this partly by reviewing the literature and partly by personally interviewing more than 100 people, mostly people he had come to know in his career, who agreed enthusiastically to participate in the study. He published separate reports on private and public sector examples. In this stage I’ll summarize my interpretation of the key conclusions from his second report,[7] dealing with the public sector, but frankly they apply broadly, regardless of sector or even of degree of business seniority.


He doesn’t deal with financial planning. There’s lots of information available about that. But he does say that even these senior interviewees said that financial planning is important and were surprised at how few people knew their financial position, even within a couple of years of retirement.


Dr Nininger identified six key lessons. They’re all linked, of course, even if inevitably they’re presented separately.

  1. View retirement as part of a journey, not as a destination. Think of yourself as a traveler, still on the road: that was the approach of those who seemed most contented in retirement. Worse, viewing retirement as a destination potentially takes you off the track.
  2. Get a life while you are still working. It’s not enough to think you’ll start to do that after you stop working. You need to develop that life while you’re working: time for family and friends, looking after your health, that sort of thing. Life during your working years shouldn’t be to the exclusion of all else.
  3. Be prepared for leaving – it happens sooner or later. Dr Nininger expresses this idea dramatically: “Being blind-sided by retirement is like standing in the middle of a freeway and being surprised when you are hit by a car.”
  4. Cut yourself some slack after leaving. In other words, take a breath, take a break, give yourself some downtime. This is a good way to create the opportunity to review your perspective on life and continue the journey happily.
  5. Renew and rediscover relationships on your journey. This ties very much into getting a life while you’re working. Now you have some more time, giving you the opportunity to renew and refresh your relationships. Otherwise there could a big void, if your life has focused on your work relationships.
  6. Make the most of this phase of your life. You can make it not just the most important part; you can make it the most fulfilling part.


You’ll recognize why I like his lessons so much. They are entirely consistent with the lessons I put forward on Route 1 – I won’t even bother to point out the stages that echo and expand on them – but he assembles them so succinctly and expresses them so clearly that I have enjoyed focusing on him in this stage.

By the way, even though the lessons are capable of being expressed simply, that doesn’t mean that everyone is aware of them or follows them.


Dr Nininger says that most who make the transition from full-time work do so smoothly. But “most” isn’t the same as “all.” He says that research indicates that up to 30% of retirees have difficulties adjusting to this new phase of their lives.

Who are these 30%? Typically the greatest difficulties are experienced by those who view work as central to their identity and have not much of a life outside it, with poor social networks. If they aren’t flexible in dealing with change, that makes it particularly difficult to cut the psychological attachment to their former jobs. Imagine, then, if they experience forced retirement. You can see that I’m virtually pushing all the characteristics onto a single imaginary individual, but you’ll get the idea that any of these characteristics can cause problems.

What kind of problems? “Denial, fear, boredom, feelings of uselessness, stress, physical illness, depression, and, in extreme cases, suicidal tendencies and death.” For now I will point out that Stages H 41, H 53 and H 54 are offered as a possible starting point for those experiencing transition difficulties.

Let me not end with the problems of the 30%. Let me rather remind you that 70% make the transition successfully, and that their path potentially leads to the best phase of their life.



Six lessons have enabled 70% of people in this survey make a smooth transition from full-time work. Follow them and you won’t be one of the other 30%.




Where the route takes us

Expert observers have categorized retirees into broad patterns. Do you fit any of them?


Sometimes it’s useful to see how experts categorize us. While we may see ourselves as unique in some aspects of our character or behavior or beliefs, it can also be reassuring if we find that we’re not peculiar, that there are others who are in many ways similar to us. And it can also be instructive, giving us ideas that others have had that are consistent with our own patterns but that we never discovered for ourselves. Of course, it can also be fun to step back and see how those experts look at all our differences and reduce them to just a handful of types.

So in this stage I’m going to give you the wisdom developed by two experts who have categorized retirees into broad patterns, with further insights from a third.


Nancy Schlossberg[8] has identified six major paths that retirees follow. Not that people don’t move from one path to another or sometimes combine them, but still, it’s a useful way to think about a mindset for life after full-time work.

There’s an obvious starting category, the Continuers, those who do what they used to do before retirement, just less of it while they develop new activities.

In a different vein we have the Involved Spectators, who no longer keep at their previous work, but like it so much that they stay involved.

In contrast, think of the Adventurers, those who take the opportunity to change course and embark on something quite different that they may have dreamed of doing some time.

If that’s where you want to go but don’t have a developed dream, you may be a Searcher, looking for your niche, perhaps trying different things to see which one captures your spirit.

Does all of that sound too active, too busy? Perhaps, then, you’re an Easy Glider, with a focus on relaxation, though that doesn’t stop you from doing all sorts of things — just not one dominant thing.

And finally she identifies Retreaters, of which she has found two versions, one stepping back, at least for a while, before figuring out what comes next, and the other getting depressed and becoming couch potatoes.

Much more detail can be found in her book.[9]


Fred Vettese[10] arranges his categories differently. He bases the distinctions on spending; in particular, how we assign relative priorities to regular spending (all the predictable things, including, for example, travel), rainy day spending (the unexpected things that are too big to ignore, like medical spending, home repairs, a grown-up child’s urgent request for money) and bequests (leaving money to others after you’re gone).

He calls his first category simply the Mainstream Retiree. For them regular spending is the high priority. Rainy day spending is not ignored, but it doesn’t rank as highly. And a focus on bequests declines over time as there’s less money available. Overall, the main goal is to maintain the lifestyle they have chosen, and not take much risk that could result in a nasty surprise.

His next category is the Cleavers, named after the beloved Leave it to Beaver TV series. Their main focus is to ensure that their children have financial support, possibly even beyond the grave, in case they are not otherwise able to cope. And their own lifestyle is adapted to make that degree of support possible.

The third category are the Super-savers, who are so used to saving while they work that they can’t change that mentality, even if they have to live less well than they dreamed of. They are highly likely to leave a lot of unspent money, and if a rainy day arrives they’re more than adequately prepared.

The members of the fourth and final category are the YOLOs, for “you only live once.” As you’d guess from the name, they favor immediate gratification. Not that they ignore rainy day provision or bequests; but those are low priorities, as their fear is to end up with a lot of unspent wealth.

Again, Vettese’s book expands on all of this, and is focused on explaining strategies that wring out much of the variability of retirement income and lessen anxiety about making it last for life.


When I saw the category of Super-savers my mind went at once to the writing (one of many pieces of wisdom) of Dr Meir Statman. In this case I’m thinking specifically of a piece he wrote for the Wall Street Journal, entitled “When good money habits turn against you.”[11] He reminds us that if you spend a lifetime acquiring good habits, like saving for a longer, more fulfilling retirement, it can be very difficult to suddenly abandon that habit, even though it becomes an impediment in retirement.

He cites a man who wrote in a blog: “I bought in early to the idea of saving for retirement over consumption, perhaps without really thinking about it. Along the way … I became frugal. Changing now would be traumatic for me.” Dr Statman suggests ways to overcome the mental barrier to spending, such as by use of a “managed payout” fund that pays out a constant percentage of value, feeling like withdrawing only investment income though in reality it’s a combination of income and capital.


My purpose in this stage is twofold. One is to bring you the wisdom of experts. The other is to enable you to realize that, if you recognize yourself in any of these snippets, you are not alone.



Five behavior patterns, four spending patterns. If you recognize yourself … you’re not alone!



This is Walk 8 in Life Two.



This is Walk 9 in Life Two.



Where the route takes us

Some of us are good at planning, others are more spontaneous. We need both qualities to enjoy our lives. The thing about planning is that it helps even when the plan doesn’t work out.


The plan is nothing. Planning is everything.

That’s the gist of General Eisenhower’s philosophy as he planned for D-Day in 1944. Or at any rate, those are the words by which we tend to remember the sentiment today. In his book Six Crises, Richard Nixon quoted Eisenhower as follows: “In preparing for battle, I have always found that plans are useless but planning is indispensable.”  Eisenhower meant that the plan is bound to need change as events develop. This is not new wisdom. We remember von Moltke saying (this was in the 1800s) that no battle plan survives its first contact with the enemy. (Though again, when I looked up the actual quote, it was less memorable: “No operation extends with any certainty beyond the first encounter with the main body of the enemy.”)

No matter how we express it, the wisdom is that it’s the process of planning that gives us an understanding of the goal, the resources, how things might interact, some notion of likely challenges, what defences are available, and so on. That’s the invaluable part.

It’s the same in life. We may have all sorts of ideas when we’re young. Then we try one, and perhaps it works for us and perhaps it doesn’t. Either way, the odds are that, as a result of the experience, we try something else. If the first experience was positive, the second may be similar, but perhaps at a more advanced level, or in a slightly different field. If the first experience was negative, we may try something completely different.


We’ve often heard that life is a journey, rather than a destination. I’ve thought of it as a journey through a series of rooms. We find ourselves in a room. We explore it and become familiar with it. Eventually we find that it has a number of doors we can open. We try one of the doors, and find ourselves in another room. After we explore it eventually we discover that it too has a series of doors. And so on. Every door we go through may have some logical connection with the room we’ve just been in, so the journey has some logic to it. But look at the journey of your life after you’ve been through many rooms, I’ll bet you could never have predicted the path. By the end, there may be little connection with the room in which you started. And yet that’s part of the fun, not knowing exactly what comes next, having something different to explore.

When you stop working full-time it’s a lot like that, particularly the early part. This is a new territory; at the very least, it’s a new room. Explore it. Make plans. Try them on for size. And then continue or enhance what pleases you, and change what doesn’t.


It’s not a failure to find that something you thought would make you happy, doesn’t. An academic, Daniel Gilbert, wrote a whole book on exactly that theme. He called it Stumbling on Happiness (as I mentioned in Stage H 12). He shows that we’re actually very poor at guessing what makes us happy; that’s why we tend to stumble on happiness, almost accidentally, rather than finding it confidently in exactly the place and the way we expect.


In connection with leaving full-time work, we often encounter the departure in an unfortunate way. Many of us plan when we’re going to retire, and then find retirement forced upon us earlier than we wanted. Annual surveys by the Employee Benefit Research Institute consistently show that many Americans find themselves retiring unexpectedly: 50 percent in 2015, for example.[12] Many who retire earlier than planned cite hardships such as ill health, losing their job because of corporate reorganization, and having to look after a family member in poor health.


Among the stories I’ve heard regarding retirement, one is that most of what turned out differently has been psychological. One person in retirement felt all kinds of things much more strongly than during the work years, as if emotions had been suppressed by work pressures and finally released after work ended. Another was influenced by both parents approaching age 90, making him realize that he wanted to purchase deferred annuities with long-term care features. (See Stage T 09.) Yet another reflected that it was very tough to plan, because our brains are hard-wired to think short-term; in trying to come up with “the number” (the single simplifying number that journalists and authors love, to sum up all of retirement finance), he discovered that the complexities of life made any one rule irrelevant. A heartfelt recommendation of his was that it’s better to save too much rather than too little, so that you can retire to something and not spend too much of your retirement time worrying about how to pay the bills or pay off the mortgage you still have – a situation apparently true for one-quarter of American retirees.[13]


I’m not trying to give you rules. Exactly the opposite. I’m suggesting that it’s worthwhile for you and your partner to take a little time to think about what you’re going to, rather than entering a vacuum.

Human beings are social creatures. Keeping in touch with family, with friends, with social institutions like a church or a school or sports and social clubs – these are all important for mental health. (Think of your “life’s abundance portfolio” – see Stage H 11.) One nice aspect is that many retirees find that their day fills up rapidly, so much so that they wonder how they ever had time to do all the other things they were pressured to do when they were working full-time.

I have a personal reflection on that. I think we spend a huge amount of adrenaline in our working years, doing all the things that are expected of us, running at an unnatural pace. In retirement those pressures relax, at least to some extent, and the pace slows. Perhaps even right from the start of the day. I know people who have expressed joy that they no longer wake to an alarm clock – something I too cherish.



It’s worth making a plan, even if it doesn’t work out the way you expected.




Where the route takes us

At the opposite extreme from those unwilling to change is a couple who actually did a “dry run” to test how their retirement might work. In this stage we’ll explore the why and the how with them.


What’s a retirement dry run? It’s not the real thing, but a sort of practice run to prepare for the real thing. And I know a couple who have done exactly that. Call them S (for She) and H (for He). They’re an interesting couple.

S works with a firm of financial planners, and is happiest when she is helping a client make a success of things. She isn’t a mathematician, but lives with numbers. She comes from a family that takes responsibility seriously, and to which responsible young people are attracted as role models. You know that when any member of that family commits to doing something, it will be done and done well.

H is a down-to-earth, practical guy, a lover of old cars. He is one of the wisest people I know, though his wisdom comes from life experience rather than book learning. He sees straight through to the heart of a matter, and brooks no nonsense. And, like S, when he gives you his word, you can bank on it.


The idea occurred to S, and it was accidental. A friend of their daughter’s was living with her parents and had just qualified as a teacher. She wanted help to plan for buying a house, but had no idea at all about managing a budget. S suggested continuing to live with her parents for the following year, and paying an amount to them every month that they could save for her, equal to the costs of food and other expenses that the parents were happy to meet, plus the monthly payment on a mock mortgage of an amount that a bank could tell her she could qualify for. Either the friend would cope, and find that she had enough saved for a downpayment, or she might be able to save less, in which case it would take longer. Whatever the outcome, it would be a simultaneous learning and saving experience.

That’s when it occurred to S that this was an equally good idea for retirement. What if she and H tried a retirement dry run? It would help them answer the question: what would we do if our income dropped 40%? At least they’d realize what they needed and what they could afford.

But the idea didn’t come to life until a few years later, when H suddenly asked S one day: “When will we be able to stop working?” His job was necessary for making a living, but unrelated to his passion for fixing and running old cars.

S replied: “I have an idea. Stop me immediately if you think it’s dumb or if there’s something you think won’t work.” And she explained the idea, which involved tracking (for the first time) everything they spent. She would do the analysis; H’s responsibility would simply be to hand her all the receipts for everything he spent money on, every day. And that’s what they did.


Her analysis consisted essentially of recording payments under two headings: expenses that would continue into early retirement, and expenses that would stop at retirement. Some had to be split across both categories, of course, like the expenses for their second car, which they anticipated wouldn’t last too long.

Experience eventually caused her to make some changes. First, they awarded themselves a weekly allowance, and skipped recording those expenses. (They didn’t cheat. They’re not the type, and anyway there was no point fooling themselves when the whole point was to make an honest assessment.) Second, they realized that there would be new expenses in retirement, for example when their work-related healthcare benefits stopped. (And they added the cost of replacing the second car with a used one.) And third, there were expenses that were occasional rather than repetitive, like home repairs; S added them all up and converted them to an average monthly amount. With these simple but tedious tasks, she compiled a post-retirement monthly budget.

Would it be enough?

She went to an expert at her firm and took all her information: her (and H’s) latest Pillar 1 pension income projections, and their tax-sheltered and other assets. Question: if the expert projected everything to age 65, how much would she and H be able to spend (after tax) in the first year after 65?

It turned out that the answer was: roughly 60% of what their current aggregate spending amounted to. Coincidence: there would indeed be roughly a 40% reduction. But, more important, that 60% was pretty much what S, after her analysis, estimated would be necessary after retirement.


What, I asked her, was her reaction? Lots of emotions!

First, huge relief! “It’s within reach!” They’re a modest, modest-earning couple, and it was very satisfying that their frugal past lifestyle had helped get them to the point where their current lifestyle was essentially fully funded in retirement.

Second, surprise. S had expected the process to reveal flaws in their planning. Maybe, she thought, it would turn out that they didn’t have enough, or she hadn’t anticipated X, Y or Z. Those didn’t happen.

And they also learned a couple of lessons.

One was that the process would never have worked in reverse. If they had started with the assumption that they would have to cut 40% from their current spending, it would have caused panic to estimate their current budget and then adjust it to 60% of its current size. But the simpler opposite approach worked fine – first see what you’re actually spending money on, and then the comparison (60%) with total current spending is an incidental and interesting number, rather than the one that dominates everything and dictates what action should be followed.

The other was that nobody else she knows does this. She was now more sensitive to hearing others talk about retirement: “We’ll do A, B and C,” “We’ll cut back on expenses” and so on. But it’s clear that those others have never given any serious thought to what they’re saying, they’ve never actually done it, and they simply assume all will go well.


I had a few more questions. One in particular. She had asked the expert to project to the first year of retirement. What allowance was made for post-retirement inflation? What if the same spending cost 20% or 30% more, 10 years after they retired? Answer: they hadn’t thought that far ahead, yet. It was enough just to know that retirement is already within reach. For the long-term future, there are two possibilities.

In one scenario, slow but steady inflation is the big issue. They anticipate that their spending will gradually decline over time. That alone could solve the problem: reductions counteracting inflation. Or they could downsize from their current home, which is itself modest.

In the other scenario, something serious changes everything. In which case they have already gone through the planning exercise, and will be better prepared than most to adjust their lifestyle to cope. The learning experience has been tremendous, and gives them lots of confidence.

I also asked H about the experience, to see what it added to S’s perspective. And he had two very practical observations. The first is that instinctively it put his back up, until it became clear that his only responsibility would be to put his receipts in the folder, and there would be no analysis of spending. This is what subsequently became the weekly allowance, no longer recorded as individual items. His second observation was that it won’t work for couples who have something to hide from each other, and conceal some of their spending. Very true! But it needs to be noted explicitly.


Meanwhile, let me just complete the story, as of the date of my writing. They’re still working (and their retirement dry run continues, in an even more sophisticated mode). They know they can retire. S enjoys her work, but will be happy to cut back to part-time status, something her firm will be equally happy to accommodate (and which will create an additional margin of safety).

When? That call will be made by H. He was the one whose question triggered the dry run. His will also be the call that triggers the real thing.



A retirement “dry run” is unusual, but it could be a great learning experience.




Where the route takes us

Not everybody has, or finds, a financial professional to help them. This stage looks at the kinds of attitudes and issues people typically have in connection with pensions, through the eyes of a rare national advisory agency.


Right from the start (Prologue, P3) I’ve suggested that you don’t need to become an expert on financial matters. Instead, you need to be a consumer of expertise. But I’ve really made an assumption there. I’ve assumed that you will find an expert to help you. Let’s face it, most people don’t. What if you’re one who hasn’t found, or doesn’t want to find, an expert?

Most people simply don’t think about retirement until it happens, or comes near. In fact, for some it comes unexpectedly, before they’re even ready to think about it at all. There may be a family member who suddenly needs care, or they may be laid off, or they may themselves fall ill. No matter what the reason, their working career ends and they’re caught unprepared.

Even if they do start to think about it, they’re typically confused and don’t know where to start, so broad and complicated is the subject of life after work. People tend to trust their employer or their union, so a conversation with someone at work may help, whether a formal consultation or just water-cooler talk. Or there may be a family member who knows something about it or has recently retired. If nothing else, any of those approaches is at least a start. Who knows, you may even have come across this book. But do remember, rules often change on financial products so what your uncle, friend or work colleague did may no longer be possible or new opportunities may be available to you.


Or, if you live in the UK, you’re unexpectedly lucky. Because the government has an independently run service to help you, if you get in touch. Actually, it has more than one, and is considering merging them.[14] There’s the Citizens Advice and The Pensions Advisory Service (TPAS), together delivering a service called Pension Wise. I believe there are national pension plans in other countries and some of them offer services to their citizens. I’m more familiar with the UK because I’ve lived and worked there for many years, and was fortunate to be able to interview Michelle Cracknell, the Chief Executive of TPAS, in the summer of 2017. TPAS was a charity set up by one Margaret Grainger who, after years working in the pensions industry, like me, realised that no one should have to make choices about their pension without help – which is the motivation behind this book. The Government liked what they were doing so much that TPAS took on its government role in 2006 and was then selected, along with Citizens Advice, to deliver the Pension Wise service in 2015 when the law changed to permit people with defined contribution pension savings total flexibility in how they accessed their pension pot (as formal pensions savings are called in the UK) after age 55. Clearly, the suddenness of total flexibility required people to have access to knowledgeable and impartial advice, if they were to make informed choices. Enter TPAS. Now TPAS deals with people in a range from those who can’t afford to buy a refrigerator to those with multi-million-pound pension pots. As well as permanent staff, it also has an army of volunteers, all pension professionals with years of experience, who help deliver the service.

This isn’t the place for how to get in touch with them and details of that sort. Rather, my purpose is to see what aspects of their experience might extend to any country.

Before I even get to that point, let me observe that it’s wonderful to see how they give volunteers an opportunity to share their knowledge and experience in helping the general public with their pension problems. Among its volunteers TPAS has actuaries and lawyers, some who have retired and some who are still working – indeed some whose time has been donated by their employers, who believe in this sort of public service. It is particularly fulfilling for retired volunteers who thought their professional knowledge would never be useful again. Wrong! The knowledge of these volunteers can help you make more out of your pension, which can change your life.


Do people anticipate retirement? In general, no. Most people think “it’ll just happen,” as a part of life that they don’t control. Often they seem to have developed half a story, based on what happened to parents or friends, and they assume they have to do the same thing – even when it’s not what they want to do. Turning them into empowered consumers of pension expertise is thus a natural goal for TPAS. (And it’s good to see the theme of my Prologue stage P3 confirmed so powerfully.) Since enquirers (whom TPAS thinks of as customers) see pensions as complicated, they are also more likely to see them as depressing rather than liberating.

TPAS doesn’t ask them questions related to pensions. They simply ask customers questions about themselves and what they want – the subjects that the customers are expert on! – and then try to apply that background and those thoughts to practical choices regarding pensions, the “pension diagnostic” as Michelle calls it.

Is there anything that would make the initial contact more productive? Yes: it would be very useful if customers had the latest statement about their various sources of pension. Most customers don’t know how much retirement income they will receive, and don’t know how to obtain estimates.

Many customers don’t think of their state pension (as the national pension is called in the UK), or of any entitlement from a workplace defined benefit pension plan, as their money. (We’ll see, in Stage F 28, that these are truly a kind of personal wealth, but because they only come in the form of an income and don’t get measured as an equivalent lump sum, their value is easy to forget.) What does feel like cash to them is any personal savings they may have accumulated, over and above a workplace pension. So when they retire, they often take their defined contribution workplace plan accumulation and put it in their bank account, because that gives them a feeling of ownership. Not always the best choice.

Many of the questions asked of TPAS involve disputes or claims or misunderstandings on contract terms or taxation or other complaints. Inevitably these are specific to the individuals or to the UK, so can’t be generalized – except of course for the fact that they occur so often. Unfortunately, pension scams feature in the questions and queries but thankfully, increasing numbers of customers contact TPAS to check that what they’re being offered is legitimate – a helpful development.


Does the financial industry see TPAS as a rival? Far from it; the opposite is true. In fact, TPAS is funded by a levy on the industry. They are helpful to the industry because they indirectly perform a sort of screening or qualifying function, saving the industry time, in that they observe that customers tend to fall into one of three broad categories. One is those who are diehard self-serve people, do-it-yourself-ers who are making contact to clarify something before they act. A second group would not be desirable customers for the industry, with assets too small to be of interest; these people do at least get some help through their contact with TPAS. The third group is those who come to realize that they have important decisions to make, and if they approach financial professionals after speaking to TPAS, they appreciate the value of regulated financial advice and are then more likely to be willing to pay the fees involved.

Throughout their contact, TPAS tries to assess their customers along three dimensions. One is their financial capability: how knowledgeable do they seem? Another is their degree of confidence, which may itself seem either reasonably or inadequately supported by their financial capability. The third is the degree of interest shown. For example, some customers are high on the first two but give the impression that the subject is of low importance to them.

I have the strong impression that this is a very useful service, and one that would be a positive addition to the landscape if it could be replicated in other countries. TPAS tries to extend its utility in the UK through outreach (visiting a number of organizations in person and virtually), and by using news stories in tweets to draw attention to pension-related issues, thus attempting to create teachable moments on a subject that is typically a low priority to much of the population.

If you’re in the UK or have a UK pension (many of their customers live abroad), I hope this gives you an incentive to contact TPAS.

If you’re reading this and are not in the UK, I’ll bet you wish you had access to something similar. Perhaps with this background you’ll have some ideas as to what to ask a financial professional or someone from a similar service in your country.




Access to an independent advisory service is useful and has lessons for us all.




This is Walk 22 in Life Two.



Where the route takes us

In this stage, let’s look at why some people are so closely wedded to their current lifestyle that change becomes impossible to contemplate.


In my career as a pension investment consultant I worked with many senior corporate managers and some boards of directors. The interactions were governed by retainer relationships, so my colleagues and I worked essentially as part-time staff for the clients. That meant that I got to work with a number of those senior managers for a long time, and I came to know them well.

My most enduring recollection is that they were nice human beings. They cared deeply about their work, and it was very important to their sense of identity. They worked hard and late. I wondered sometimes about the impact on their family lives, but those seemed OK too, because working long and irregular hours, with lots of travel, was simply taken as par for the course.

For the most part these were decisive people, willing to act under uncertainty, willing to speak their minds, mutually respected by one another. In fact their identification with their jobs and their comfort with being around one another for huge lengths of time were characteristic of the preconditions for a sort of extreme retired executives syndrome.


Think of the world they’re leaving. They have climbed to the higher rungs of the executive ladder, and everyone knows it. They’re respected, looked up to. They’re constantly asked for input, advice, decisions. If they need research done before a decision, they commission the research: there are always people who jump to do their bidding. They see their colleagues so much, not just at work but at industry functions and social get-togethers, that friendships develop, and the strongest of those friendships can sometimes feel like lifelong partnerships. Work is their life. Sometimes they may even feel more comfortable with their work colleagues than with their families.

Imagine, then, what it’s like to leave this world. Particularly if full-time work is replaced by full-time retirement. For some (not for all, fortunately) it can be a huge psychological shock. They’re almost totally separated from their closest friends. Overnight, a large part of their identity has just died. They don’t know what to do next. Not just unchallenged, but lost, at a loose end. They don’t know where to channel their energies, their still surviving competitive spirit. Yes, some can become very depressed.

No wonder retirement can have negative connotations. It’s all very well saying to them that they have had to make changes in life before. This time it’s not the same. This time it takes place after a lifestyle has become settled, indeed second nature. And this time the youthful spirit of adventure has faded, if it hasn’t gone altogether, so anticipating the future carries no excitement.


If you think it’s bad for them, think how much worse it must be for sports stars.

They have had much greater public acclaim. They have had triumphs that are hugely emotional. These triumphs have had meaning not just for them, but for their fans too, thousands or even millions of fans. The cheers, the wild applause, the public approbation – all these factors are far more intense for sports stars than for corporate executives. And they’re concentrated into a much shorter period of life, adding further to the intensity.

Guess what happens when it’s over. Many lose their identity after retiring. They can’t move on in life. The struggle to find a new purpose can lead to more serious problems such as depression, self-harm, addiction and financial problems. Even the best-prepared athletes struggle – retirement can be like a grieving process. [15]


I’m guessing my readers are much more likely to be corporate executives and workers than sports stars. But all of this emphasizes the need for planning in advance. And it also explains why, for these people, the only psychologically feasible form of retirement involves some portion of their old roles continued on a part-time basis, whether it’s an angle that involves business or volunteer service of some kind, some form of continuity.

This syndrome is not exclusively confined to retired senior executives. It can apply to anyone, at any level, whose persona is largely defined by their work, or who has settled into a comfortable frame of reference. But given the power and status that come from senior management, it tends to be identified more with high-level executives.

And so, if this describes you or someone you know, using a retirement coach, of the sort described in the next stage, may be something you might consider.



For some people moving away from a way of life that has essentially defined them for many years is extremely difficult. If it results in depression, using a retirement coach may be something to consider.




Where the route takes us

We recognize expertise in medicine, investing, and all kinds of areas in life.  But in living life itself – really?  What can a “retirement coach” do?  Let’s find out, in this stage.


Are you a do-it-yourself-er?

There are many aspects of Life Two for which expertise exists, if you want to search for it.

The most obvious one is investment expertise, since it’s well known that you need oversight of your assets during Life Two, and so you either do it yourself or you find an investment professional to do it for you. Much of this tour is designed to help you interact with that expertise.

A less obvious one is physical health. Of course you’ll have a family doctor. But many people also use, either regularly or from time to time, a personal trainer to ensure that they stay in good physical shape and preserve the strength they bring into Life Two. The trainer understands your physique and your health and your mindset, designs a set of exercises to help you achieve whatever goals you establish, watches how you perform them, corrects mistakes, changes the exercises over time and depending on your personal health on the day – and so on. Some people won’t exercise at all without a trainer; others do their own thing and involve a trainer from time to time to reassess and redirect. That’s the second type of expertise.

There’s a third type that’s hardly known at all: the notion of having a retirement coach. So let me explain what that involves. And I’ll get to it in two steps. First I’m going to look at what a “life coach” does, before focusing on the Life Two specialist.


Google the phrase and you discover that a life coach is “a person who counsels and encourages clients on matters having to do with careers or personal challenges.” Exactly – and the transition away from full-time work can be a personal challenge, as we’ve discussed. All the stages on this topic, up to now, have been of the do-it-yourself variety. What can a life coach do for you?

As you’ll have guessed, life coaches are mainly involved in helping people, particularly senior executives, in career-related matters. But what’s interesting is the reason why people need that kind of help at all. It’s because there is some aspect of their work style that is preventing them from achieving a goal or making a change. As you might also guess, typically the thing causing the problem is in the executive’s head: perhaps it’s the way they deal with others, or the way they think about the problem, that needs to be changed. No matter how knowledgeable or senior the executive, we’ve all known people whose personality was a problem or created an obstacle. That’s where the life coach comes in.

So the starting point is for the life coach to find out two kinds of things.

One is the person’s career up to now. The person is the expert on this aspect! As I stressed in the Prologue (see P3), you are the expert on yourself, and it’s your job to explain to the other expert who you are and what you want, so that the other expert can then help you.

The other is the person’s interacting style. I wanted to understand exactly how they discover this, since they’re not around when the interaction takes place. And there’s no better way to find out than to put yourself in the middle of this sort of thing. So, when I discovered the existence of one such service a few years ago, I decided not only to talk to them about how they can help, but also to sign up for the service myself, so I could experience it first-hand, not just via anecdotes. There’s nothing like living through an experience to learn from it!


First I had to do an online exercise. I had to answer more than 100 rapid-fire questions, making sure I completed them all in one session. If I had stopped part-way through, I would have had to start from scratch again. No doubt this is to ensure a consistent frame of mind in responding to the hypothetical situations mentioned in the questions.

Some time later I received a document analyzing my “attentional and interpersonal style,” as it’s called. The purpose is to help people to understand the conditions that cause pressure for them, and thus help them by predicting their responses to pressure. This sort of analysis, I’m told, is more typically used in screening potential executive hires and draft picks in sport, where it’s helpful to identify psychological strengths and weaknesses in advance.

100+ questions – enough to analyze me? Indeed! When I showed the analysis to my family their unanimous response was: “Nailed it!” True, there are extreme aspects to my personality, but it was still extremely impressive.

Their comments were direct, with no ambiguity. “Logic you’ve got. It’s empathy you need.” That’s how the final paragraph started. “If [you’re not] dealing with something based on logic alone, you need to find the hot buttons of other people you typically miss – their emotional needs.” How I express ideas, criticism, anger, support, affection – all there, in black and white, accurately. My decision-making style (slowly, after deliberation). The leadership role that comes to me naturally even though I don’t like to control others (I just don’t like to be under others’ control). Drive, self-confidence, self-criticism – all there.

All of that was the first stage. The next stage was for the life coach to understand my background: one of the two things I mentioned earlier. So: a thumbnail sketch, who I am, how did I become the person I am. My memories become a purposeful tool here. For example, if there’s a scary memory, help me conquer the defensive implications, help me replace it with something happier. My peak experiences: when have I been challenged or inspired?

The combination of my interactive style and my personal history then help me to start to choose, to move forward after whatever has broken down or caused disequilibrium, because now there’s insight and a focus on action. From an understanding of what was, the focus shifts to what is. Often it’s a sort of lessening process, letting something negative go. Some people can do this by themselves, others can’t, and for those others, this sort of help is useful – as with financial planning.

Is this therapy? No. Therapy goes far beyond life coaching. If the challenges are more than a life coach can deal with, therapy may be recommended, but that’s a different matter.


I didn’t go further, because at the time I was already living Life Two. I just wanted to understand (and appreciate) how psychological needs can be satisfied in Life One.

It was only recently that I discovered the existence of retirement coaches. Society has not yet discovered them. As you’ll have guessed, they focus on psychological needs in Life Two, both “who am I?” and “how will I fill my time?” I did as much online research as I could, and then interviewed one for a podcast that is linked to the Life Two book.

Here’s what I found.


They are coaches, and they focus on the psychological needs in your Life Two years, not your financial needs. As coaches, they bring expertise to you. Their role can be educational, motivational, friendly, a consultant – just as doctors and personal trainers are. And, before they can apply their expertise to help you, they need to understand you. So they need to be good listeners first, and in order to get the most value from them, you ought to have given some thought to what your needs are, and what you would consider success or failure – as set out in the exercise after Walk 3 in Life Two.

That’s because everyone is different, and the only person whose Life Two matters is … you.

They will help you with all the aspects laid out in Walks 1 through 10 in Life Two: understanding that there’s a (typically unexpected) transition after Life One, that you may need a new measuring stick for success in Life Two (because title and pay and praise are no longer available for that purpose), what you might fund fulfilling in Life Two, how to fill your time with things that are emotionally and physically satisfying as well as relaxing, how to share space and time with your partner, how to develop a new social circle – and so on.

As I said in P1 and in Walk 1, we are hard-wired to be happiest in Life Two. Ironically, irrational and unnecessary fears about retirement hinder the achievement of this happiness. Anything that helps us to remove our irrational fears and understand what Life Two involves is pays big dividends.

I hope you’re starting to see how this might help you.


The time to start thinking about the psychological side of graduating from full-time work might be five years before you plan the transition. That will give you time to understand yourself (if you haven’t used a life coach) and think about goals, enough time to become what is sometimes called “unconsciously competent” at many things, that is, become capable of doing them naturally, without having to think about them. You might need attention for a while, or perhaps just a quick tune-up, to conquer change that is challenging, messy and often emotional.

I described my own feelings during my transition to Life Two in Stage H 22. If there had been retirement coaches then, I’d have sought the help of one.



A retirement coach can help you make a fulfilling transition to Life Two.



Where the route takes us

Before we get there, retirement often just means “no more work.” Observation suggests that what we do once we no longer work isn’t uniform, but goes through phases.


Our language has not yet evolved to reflect different phases of retirement. We tend to speak of it as if it were a single, uniform stretched-out period. This fits the old three-part model of our lives (see Stage H 03). But research points to the descriptive paucity of this approach. Research finds that our retirements tend to have three broad phases, not unlike the third to fifth acts of Dr Laura Carstensen’s five-act play. And I haven’t come across a phrase that more beautifully captures the first of the three retirement phases than her “autumn crescendo” of our lives. At the other extreme, I’ve heard the three retirement phases called (brutally but succinctly and memorably) go-go, slow-go and no-go.


The first phase, the autumn crescendo (for those who are lucky enough to have the health and the energy for it) is the ideal “dream come true,” the time when you can finally get to do all the things that are pent up inside you, the things that have had to wait until now because the need to work was pre-eminent.

This is when you travel, perhaps even explore a place to move to. You are physically active, with golf and tennis, working out and swimming and walking. You may work part-time, or volunteer. It’s a full life, and so financially it’s potentially the most expensive phase of life after full-time work, with new expenses reflecting your new life and replacing the former cost of commuting and professional clothes and lunching out.

How long does this last? It depends on what curtails it. It may go to 75 or 80 or longer if your health remains, particularly if your partner is noticeably younger than you are; in that case, it slows gradually. It may come to a close more abruptly through ill health or the death of a loved one.


In any event, the second phase is a downsizing of the lifestyle, perhaps also of the home. The daily and weekly lifestyle is now more predictable, and you settle into routines that you’re comfortable and content with, perhaps replacing some physical routines with hobbies and gaming evenings and get-togethers, like for bridge and book clubs, and other activities to ensure that life remains social. Volunteering continues, though perhaps at a late stage of this phase you may find yourself needing volunteer services rather than providing them. As you would guess, the cost of this phase of the lifestyle is typically much lower than in the autumn crescendo. By its conclusion, health issues may have become apparent.


Whether or not there is a third phase, and how long it lasts, inevitably varies a lot from person to person. Again, there may be an abrupt end to the second phase. If not, the gradual shift may also be accompanied by a noticeable loss of cognitive ability, which may in fact have been on its way for some time even though only occasionally apparent (and typically denied). Whether the cause is mental or physical, the result may be a phase when external help is needed, from the community (government) or family.

Expenditures on healthcare and medications can rise sharply in this phase. Assisted living is not inexpensive, though it’s tough to generalize beyond that statement because government programs vary so much from country to country and even from state to state. I remember an American study that said that expenses in the final year of an individual’s life are, on average, five times as high as in a nonterminal post-retirement year, and 30% of the final year’s expenses occur in the very last month.[16] Nevertheless, the third phase is typified by such a decline in other expenditures that, even with the medical increases, the overall trend is down rather than up.


I mention all this for two reasons. First, it’s a description of life after full-time work, both emotionally and financially. Second, it has consequences for financial planning. And again, the consequences come potentially in two parts.

First, not only is it consistent with why risk tolerance declines in retirement; it also suggests that risk tolerance may not be constant throughout retirement. I haven’t seen this explicitly studied – most studies to date have focused on workers, and to the extent that they consider retirees, they lump them together as an undifferentiated species – but I would guess that by the second or slow-go phase described here, most retirees would probably want their finances to have transitioned into safe and secure investments rather than still risk-taking in search of further growth. Indeed, by the slow-go phase retirees may want to relieve their children of the worry that could come from knowing that their parents’ investments still need supervision.

And second, given the declining trend of expenditures over the three phases, any plan that generates fully inflation-linked drawdowns from the pension pot in retirement contains a considerable margin of safety.



Post-work life often has three phases: the “autumn crescendo,” a downsized lifestyle, and possibly one involving health issues.




Where the route takes us

Life is uncertain, and the choices we make expose us to risk, that is, the chance of an unfavorable outcome. But hey, we often have time to make good again, if things go wrong. However, as the available time shortens, how does that affect our attitude to risk-taking? That’s what this stage focuses on.


The word “jargon” means a term that, for experts, is a useful and concise way to express a technical idea without having to spell out its full meaning every time. And so it typically confuses the layman, who doesn’t understand it exactly. I was reminded of this when I saw how behavioral economists (the people who study human behavior in order to explain the financial decisions we make) explained how we react when we have to reduce our spending pattern unexpectedly.

They refer to “involuntary downscaling” and “habit formation” and “constraints” and “a sharp drop in utility.” What they mean can be expressed much more simply. It goes something like this:  Suppose you find that something has happened and suddenly you’re forced to confront the fact that your lifestyle of many years has become unaffordable. You hate it!

They add that you feel it even more strongly if the reason for the change comes from some form of prior commitment, or some form of investment, that we can’t change, or which would be very expensive to change.

In other words, we get used to our spending patterns. A small change is something we can cope with. But a big change – no, that shocks us. And it’s even worse if making the change is very difficult because we have already made a big financial or other commitment, which is difficult or expensive to unwind – that really, really hurts. (They’re not saying it’s impossible. In a sense, nothing is impossible. They’re talking about how it makes us feel, to be forced to make a big change.)


Retirees feel this even more strongly than people who are still working. The reason is that people who are still working have an approach open to them to make up some or all of the loss. They can work longer. They might be unhappy about the prospect, but it’s an avenue open to them. But think about a retiree. That avenue is now closed. They can’t add to their assets via work income.

This explains why retirees are very risk averse. (Sorry, “risk averse” is jargon; it means that they are averse to, they don’t like, taking risk.) More risk averse than workers, typically.

Dr Shlomo Benartzi of the UCLA Anderson School of Management points out that the average retiree is five times as risk-averse as the average worker,[17] meaning that they’d like odds five times better than the average worker before they’ll take a risk. Average workers typically want a payoff two to one in their favour, or they won’t expose themselves to a financial risk. That means, for example, that if you offer them “win or lose $100” on the toss of a coin, they’re unlikely to accept the bet. Offer them “$2,000 if you call it right, but you only lose $1,000 if you’re wrong” – that will tempt them. Average retirees typically want ten to one.  They want “$10,000 if you call it right, but you only lose $1,000 if you’re wrong” before they’re tempted.

Yes, I know all people are different. But those are the averages that experimenters have found, when serious money is involved. (Play money is different – that’s gambling just for fun.)

One of the consequences is that retirees are particularly reluctant to make irreversible commitments, and preserving flexibility is very important to them. We’ll look at some aspects of this attitude in Stage F 51.



As we age, we are naturally inclined to reduce the amount of risk we take.




This is Walk 10 in Life Two.




Where the route takes us

Love is something we do at any and every age. Sex is fundamental to procreation as well as pleasure. The two are not the same thing.


A quick anecdote, to start with.

I was the first actuary hired by Russell Investments, way back in 1984. So the actuary’s perspective, dealing with estimating how much money a pension fund needs for the retirement security of its members, opened a whole new dimension of thinking at Russell, where the focus had until then been exclusively on what to do with the money. Now both angles, the assets and the liabilities, could be considered together, and my new colleagues found this fascinating. Rather than be exposed to the new perspective one incident at a time, one colleague asked me if I’d conduct a small internal tutorial on the subject. Knowing my colleagues, to attract the biggest crowd possible I advertised the session as “Sex and Actuarial Principles.” Yes, a large number showed up. I used that as my title slide; but the second slide then said: “Part 2: Actuarial Principles” and I added: “Too bad you missed Part 1!”

That got the laughter and ribald comments I hoped for, and I was feeling pretty pleased with myself, so when I went home I told my wife about it. And she promptly responded: “You, talking about sex? They missed nothing!”


And nothing has changed. So you can guess that everything I say in this stage is taken from somewhere and someone else. In particular, after much online research, I found a doctoral thesis that, while formally focused on sexual activity among those aged 65 and over, also dealt with important other aspects of relationships.[18] (The sample consisted mostly of white Americans.)

The sexual findings are no surprise. Frequency of sexual activity is associated with general happiness, in particular with marital happiness. Married elders tend to be more sexually active than the non-married: quite simply, the lack of a partner is a serious barrier. Incompatible views about the importance of sex in marriage can contribute to marital unhappiness.

There is tremendous variability regarding sexuality in the older population. But in general, although desire remains strong, the prevalence of sexual activity declines with age, for reasons that are associated both with biological changes and with disease.


Sexual activity is not just central to human existence; it also brings physical pleasure and emotional fulfillment, as well as being an important component of good physical and mental health. But it is not the only way in which love is expressed. And so I was particularly interested in the author’s review of the existing literature, because here her investigation goes beyond sexual activity and explores the question of feelings. Let me summarize her findings.

Sex is not everything. It’s a myth that women have lost their sex appeal in older age, and that men are defined by their physical performance. It’s the full range of expressions of love, rather than the sex act itself, that reflects a couple’s feelings towards each other. Sexuality is not just intercourse; it takes many other forms, such as kissing, touching, caressing and cuddling – these are particularly important when old age or disease prevent intercourse. That’s because intimacy has an emotional component too, and involves the interpersonal relationship between two people, including the mental trust that allows the disclosure of one’s innermost thoughts and feelings to the other.

An article in The Economist[19] reports on another study that broadly confirms all of this. It starts by observing that 50% of investigations show that in matters matrimonial, sex is crucial – yet the other half suggest that the answer is “no.” A particularly ingenious study dug beneath what people wanted to say about their marriage – after all, who wants to admit negative stuff? – and found a way to explore their actual feelings. It found that the frequency with which couples claim to have sex does not have much correlation with how satisfied they claim to be with their partner; but it does correlate well with their automatic attitudes towards one another. In other words, sex is not everything, but it does reflect underlying feelings.


To end this on a light note, permit me to recall a conversation I had with a friend some years ago. Invoking the analogy of a champion racehorse, he said: “I don’t want to retire, I just want to be put out to stud.” Good luck, buddy!



Sex is important, but there’s more to love than sex. Or, if you prefer to see it the other way around: there’s more to love than sex, but sex is important.



This is Walk 23 in Life Two.




Where the route takes us

Among the things we particularly dislike even thinking about, letting alone talking about and planning for, is the potential indignity of aging. And if we have no advance thoughts about it, we may become just medical “cases” to doctors rather than human beings with feelings. In this stage we explore approaches that help maintain dignity.


We have seen (in Stage H 61: Three broad phases of life after full-time work) that we might experience a final phase of retirement in which our activities are severely curtailed. Indeed, we may need external help in this phase. And that raises issues of personal comfort and happiness that the medical profession does not always deal with, if they focus on medical concerns and survival (length of life) more than on the quality of life. Let me give you some quotes from doctors in three countries who recognize the difference and are doing something to influence the profession’s priorities, so that they focus on care when they cannot cure.

In the UK, Dr Matthew Boulter is quoted as describing current (2014) practice as follows[20]: “If you are struggling at home, we put you in one room, we bring your bed in, we bring your toilet in and we bring your meals in and that’s you. And the system turns around, with its head held high, saying: ‘She’s medically well and she’s catered for. She’s got a roof over her head, she’s warm, she’s got food in the fridge, job done.’ No one’s ever asked that person, what’s important for them?”

The reporter who wrote the piece adds that one man (when asked what’s important) dreamed of seeing his dog run on the beach again. A woman yearned to have her hair properly washed after months in which carers had applied only dry shampoo. Another woman hadn’t left the house in five years, and her dearest wish was to visit a newly opened branch of Sainsbury’s (a grocery chain) and choose her own groceries. These are little things that may be of major importance to the individuals concerned but aren’t statistically important as regards the medical outcome.

In Canada Duncan Sinclair, a leader in healthcare reform, makes it personal[21]: “My needs and wants … add up to a short list: respect for my continued dignity and personhood; staying in my home; no pain or suffering; and not being a burden to others.” He expands on the first of these as follows: “I want to be considered a person, not a patient, regardless of how much I then depend on a panoply of physicians, nurses, support workers, therapists and pharmacists … I want to remain Duncan Sinclair, not the incontinent, demented old guy in bed in Room 6.” And on the third one (avoiding suffering) as follows: “This is less about avoiding pain and discomfort than it is about maintaining my status as a person with the right to make my own decisions, including decisions about my very existence.”

In the US, Dr Atul Gawande, author of Being Mortal,[22] has spoken extensively (and made a movie) about the issue. In a keynote address[23] he said: “What we’ve seen is a 50-year experiment with medicalized mortality – that experiment has failed.” He added: “People go into medical school because it’s a chance to fix … But when I got into practice, I found I spent a lot of time with people whose problems I couldn’t fix … I’m a surgical oncologist. I think end-of-life care is a basic skill that we haven’t really been taught. It’s very clear that often quality of life and curative intent are separated.”

I have no idea myself the extent to which these quotes capture medical practice, or whether they only describe one end of the spectrum. A doctor friend of mine involved in community and psycho-social care in Ontario, Canada, tells me that medical care these days includes a professional team that includes social workers and nurses, and they are indeed focused on care, not just on cure.


Why does this matter? Because it’s something that you may well have an opinion on, perhaps even a strong opinion. If you find that in your case the focus seems to be less on quality of life than on length of life, you should express that view clearly so that it is discussed with family and professional care providers, and recorded.

The law differs from country to country, but regardless of the law, you can still express yourself. The law determines the extent to which your wishes can be carried out, given the context of circumstances and taking into account the medical feasibility of your wishes. The documents involved are typically called an advance care directive (or health care proxy) and a living will. The advance care/health care document names somebody (and, usefully, an alternate) to make decisions for you when you are no longer capable of doing so for yourself. The living will says what interventions you would or would not prefer to keep you alive, such as the extent of resuscitation, and may include aspects of treatment and care for known conditions.

These are documents that can be prepared with professional help and advice, and discussed and a copy left with your physicians and family members. Remember that in Stage H 73 we discussed talking to your children and leaving documents with them. This is part of that same theme, empowering the younger generation to support you in this stand. So consider whether, in your case, it might perhaps be better to start thinking about these issues in mid-life rather than in retirement. And you’ll be doing something else, in addition. You’ll be providing your children with the concept of stages in their life too.


There are ways to help you think through many of the issues.

For example, Dr Gawande says that anyone involved with your end-of-life care needs to know five things:[24]

  • What is your understanding of where you are in the course of your illness?
  • Your fears or your worries for the future.
  • Your goals and priorities.
  • What outcomes are unacceptable to you? What are you willing to sacrifice and not?
  • What would a good day look like?

Much more poignantly, there’s a blog posting[25] that describes teenagers nearing the unfortunately predictable end of their lives, and the little things (yet very important preferences) they have to deal with. If visitors arrive when you’re asleep, do you want to be woken? If they start crying, would you prefer them to step outside or talk about their feelings with you? If death is approaching and you can no longer speak, what would you want those who surround you to know?

This is particularly important for patients under 18 in the US, as they have no legal rights to make advanced care choices for themselves, although regardless of their chronological age these teenagers have shown themselves to be capable of addressing intimate topics: mortality and pain, as well as love, friendship and connection. One teenager wrote notes to her family, and in the last days frantically asked to include a final thought in her farewell letter. To her grandmother she wrote: “I hope there is potato salad in heaven as good as yours.”

The document that contains a template for them is called “Voicing my choices” and it’s available from

I hope you’re inspired by this courage to make your own advance preparation.



It’s difficult to be dignified as the end nears, but these approaches help.




Where the route takes us

It’s strange – or maybe it isn’t – that sometimes we do things even when we know they’ll make us unhappy. This stage explains why.


Using the word eudaimonia (translated into English in many different ways), Aristotle reminded us that “we always choose happiness for its own sake and never as a means to something else.”[26] By extension, other goals are important to us only because they make us happy in some way.[27]

There are all sorts of theories as to what experiences give pleasure. And there are theories about what aspects of those experiences matter: their duration, their intensity, perhaps some vague notion of their quality. But since there was no objective way to measure these (and, as we saw in Stage H 02, there still isn’t), early economists such as Jeremy Bentham and John Stuart Mill coined the word “utility” as a catch-all measure of anything we find useful, in the sense that it makes us happy. The idea was simply that we reveal our preferences by our actions, and utility is an after-the-fact revelation of what we like and how much we like it.

All of this makes happiness as basic as anything could ever be, and so surely it must be true that increasing happiness is unambiguously a good thing, right?


Well, Aristotle didn’t know that happiness and sadness are not opposites. More happiness doesn’t automatically mean less sadness, or vice versa. Happiness and sadness are different things. They are not at opposite ends of a continuum. Neuroscience reveals that they have different brain circuits. And so it’s possible to increase both simultaneously or to reduce both simultaneously. (Think of bittersweet feelings, where both happiness and sadness are present.) And in turn that means that, if we are to come up with a single measure that combines happiness as a good thing and sadness as a bad thing, we have to find a way of making a trade-off between the two.

Bentham was also ignorant of the non-opposite nature of happiness and sadness. (Or of pleasure and pain, as he actually hoped to measure.) Hence his pragmatic solution: if we choose to do something, that must mean that it makes us happy. It’s a behavioral preference.


I found a useful discussion in a book by Daniel Nettle.[28] He reminds us that we do things for reasons other than happiness. Perhaps it’s to avoid greater sadness (choosing the lesser of two evils) or because, despite the sadness it causes, it gives us a feeling that we’re being moral or serving the cause of justice, or displaying the values or conduct that a religion espouses. Whatever – if we choose to do it, it gives us “utility,” whether that utility comes from more happiness or less sadness or greater morality or justice. We have expressed our trade-off via our behavior, even if it makes us less happy.

And so, without ever realizing that he was solving this dilemma, Bentham gave us utility as the trade-off function. In turn, this means that increasing utility must trump increasing happiness, because utility is the ultimate yardstick of what we truly cherish.


A friend pointed out to me that all of this sounds just like what an economist geek would say. She’s right. She adds that I haven’t explicitly mentioned anything about a purpose in life, anything about what gives life meaning. Because it’s when we have a purpose that we can find ourselves doing things that align with our purpose even though they may make us unhappy. It’s the sense of purpose that leads directly to enhanced utility.

And so morality, justice, religion, purpose – any of these may be, for any one of us, more important than our own happiness.



Morality, justice, religion, purpose – all of these could be more important than seeking happiness.

[1] See Chapter 10, “Happiness is … what?” in Ezra (2014).

[2] See Chapter 2, “How the human brain is built” in Ezra (2014).

[3] See Chapter 5, “Wanting and liking” in Nettle (2005).

[4] See Chapter 3, “Reenvisioning long lives” in Carstensen (2011).

[5] Levinson (1976).

[6] Statman (2010).

[7] Nininger (2003).

[8] Schlossberg (2017).

[9] Schlossberg (2017), op. cit.

[10] Vettese (2018).

[11] Statman (2017b).

[12] Helman et al (2015).

[13] Helman et al (op. cit.).


[14] As of 2019, there is the Single Financial Guidance Body.

[15] See, viewed on February 5, 2018.

[16] Hoover et al (2002).

[17] Allianz (2013).

[18] Jackson (2010).

[19] The Economist (2016).

[20] Neville (2014).  My thanks to John Grieve of the Rotary Club of Cambridge (England) for sending this to me.

[21] Sinclair (2015).

[22] Gawande (2014).

[23] Institute of Medicine meeting in Washington, DC, 26 March 2015, on action steps to improve end-of-life care.

[24] Campbell (2015).

[25] Hoffman (2015).

[26] Quoted in Ricard (2007).

[27] See Chapter 16, “Lessons and musings” in Ezra (2014).

[28] See Chapter 1 in Nettle (2005).